2 excellent ASX dividend stocks to buy this month

Analysts are tipping these stocks as buys this month. Let's see what they are saying.

| More on:
Two smiling work colleagues discuss an investment or business plan at their office.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're looking for some new additions to your income portfolio, then take a look at the two ASX dividend stocks listed below.

They have been named as top buys by brokers. Here's what they are saying about them:

Australian Foundation Investment Co Ltd (ASX: AFI)

The first ASX dividend stock that analysts are positive on is Australian Foundation Investment Company. Bell Potter has a buy rating and $8.19 price target on its shares.

The broker is positive on the investment company. This is due to its long-term buy and hold approach, robust balance sheet, and recurring revenues. It explains:

Australian Foundation Investment Co is a closed end fund investing predominantly in Australian and New Zealand equities. The investment philosophy seeks to identify well-priced priced companies by considering: (1) the uniqueness of assets, brands and footprints; (2) long-term sustainability characteristics, return on invested capital and the ability to grow or maintain market share; (3) recurring revenues and the likelihood of consistent earnings for shareholders; (4) confidence in the pedigree of the Board and management team; and (5) lowly geared balance sheets. The long-term buy-and-hold approach results in a low level of capital gains tax payable, and the provision of internal investment resourcing keeps the cost base low with scale (0.14% MER).

As for income, Bell Potter expects 3.5%+ dividend yields from its shares in the near term.

Lottery Corporation Ltd (ASX: TLC)

Another ASX dividend stock that could be a good option for income investors is Lottery Corp.

Morgans is a fan of the lottery operator and has an add rating and $5.40 price target on its shares. It believes the company is well-placed due to strong lottery volumes. It said:

TLC's FY24 result was impressive, driven by a favourable year for Lotteries and strong active customer growth. Despite lapping a record period of growth in Lotteries, we remain positive on the stock as current lottery volumes continue to perform well. The company mentioned that Saturday Lotto will be the next game to receive an update, which should benefit the base game divisions significantly and likely come with a price increase, offsetting some recent softness. Additionally, TLC reported a leverage ratio of 2.5x, below the guided range of 3-4x, and has expressed interest in renewing the VIC licence. Based on our estimates, TLC is set to deliver a 4.5% FCF yield and a 4% [now 3.75%] dividend yield in FY25. The stock trades in line with its historical valuation ranges and we view it as a solid option for investors seeking stability.

In respect to income, the broker is forecasting a 19 cents per share dividend in both FY 2025 and FY 2026. Based on the latest Lottery Corporation share price of $5.06, this will mean fully franked yields of 3.75%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Lottery. The Motley Fool Australia has recommended Lottery. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A young woman dressed in street clothes leaps happily in the air with the focus on her bright red boots that are front and centre for the camera.
Dividend Investing

This ASX dividend share is projected to pay a 10% yield by 2028

Analysts are expecting big payouts from this business.

Read more »

A couple sits in their lounge room with a large piggy bank on the coffee table. They smile while the male partner feeds some money into the slot while the female partner looks on with an iPad style device in her hands as though they are budgeting.
Dividend Investing

Want to turn $20K into a $1K second income? Here's how

ASX shares can pay you upfront for buying them...

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Dividend Investing

2 ASX dividend shares I think are great value today

These two stocks offer a lot of what I’m looking for.

Read more »

Excited couple celebrating success while looking at smartphone.
Dividend Investing

Buy Woodside and these ASX dividend stocks

Brokers have put buy ratings on these dividend payers.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Bank Shares

Macquarie share price higher amid DRP dividend news

Macquarie has announced the share price of stock to be allocated through its dividend reinvestment plan.

Read more »

Couple looking very happy while shopping at a home improvement store.
Dividend Investing

Focused on pasive income? Check out this defensive ASX 200 dividend stock

A leading expert says this quality ASX 200 dividend stock remains ‘undervalued’.

Read more »

Man smiling at a laptop because of a rising share price.
Dividend Investing

2 ASX shares that I think are buys for both growth and dividends

These businesses offer so much potential.

Read more »

Worker inspecting oil and gas pipeline.
Dividend Investing

Should I buy Woodside shares today for their 8% dividend yield?

With an 8% dividend yield and a resurgent share price, should I buy Woodside shares right now?

Read more »